Noncompliance risk, asymmetric power and the design of enforcement of the European economic governance
| Author | Fabio Franchino,Camilla Mariotto |
| Published date | 01 December 2021 |
| Date | 01 December 2021 |
| DOI | http://doi.org/10.1177/14651165211023832 |
| Subject Matter | Articles |
Noncompliance risk,
asymmetric power and the
design of enforcement of
the European economic
governance
Fabio Franchino
Department of Social and Political Sciences,
Università degli Studi di Milano, Italy
Camilla Mariotto
Department of Political Science, University of Innsbruck, Austria
Abstract
In the European Union, states can distribute enforcement prerogatives between a
supranational agency, over which they exercise equal influence, and a Council of
ministers, where power resources mostly vary by country size. What shapes attitudes
towards different enforcement designs? States at greater risk of noncompliance should
eschew deeper cooperation and prefer procedures over which they can exercise more
influence. Employing an original data set of positions on relevant contested issues during
the negotiations over fiscal governance rules from 1997 to 2012, we show that governments
at greater risk of noncompliance prefer greater discretion and, if they have higher
voting power, more Council involvement in enforcement. These factors only partially
explain positions on Commis sion empowerment. Given their greater indeterminacy,
attitudes are also shaped by national public opinion.
Keywords
Economic governance, enforcement design, international organisations, power asymmetry,
state preferen ces
Corresponding author:
Fabio Franchino, Department of Social and Political Sciences, Università degli Studi di Milano,
Via Conservatorio 7, Milano 20122, Italy.
Email: fabio.franchino@unimi.it
Article
European Union Politics
2021, Vol. 22(4) 591–610
© The Author(s) 2021
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/14651165211023832
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Introduction
What shapes states’attitudes on the design of the enforcement mechanism of an international
regulatory agreement? How are these positions affected by the enforcement institutions and
the properties of contracting states? Enforcement mechanisms come in many shapes and
forms: some arrangements lack formal procedures and rely solely on reciprocity and reputa-
tion; others contain arbitration, prosecution or dispute settlement procedures that
increase ex-post costs of noncompliance, render commitments credible and decrease
transaction costs (Abbott et al., 2000; Keohane, 1984; Koremenos et al., 2001: 763;
Raustiala and Slaughter, 2002; Simmons, 2010). Scholars have identified several
factors shaping the design of international organisations, such as the depth of cooper-
ation, the extent of trade interdependence and the number of and power asymmetry
among contracting states (Haftel, 2013; Hooghe and Marks, 2015; Hooghe et al., 2013;
Koremenos et al., 2001; Koremenos, 2008: 154; McCall Smith, 2000). However, these
researches have paid no attention to whether and why states frequently do not share the
same position over the design of an agreement’s enforcement mechanism.
We address this question by analysing the governmental positions on the enforcement
of the fiscal governance rules of the European Union (EU). The EU has the world’s most
advanced compliance system. It combines an international bureaucracy (the European
Commission, henceforth Commission), in charge of taking noncomplying member
states to an international court, with a decentralised procedure, based on national
courts referring cases to the international adjudicatory body (Tallberg, 2002; Tallberg
and McCall Smith, 2014). Scholars have extensively investigated both the monitoring
(e.g. Fjelstul and Carrubba, 2018; König and Mäder, 2014) and the adjudicatory (e.g.
Alter, 2001; Burley and Mattli, 1993; Carrubba, 2005; Carrubba et al., 2008; Stone
Sweet and Brunell, 1998) stages of this process. However, this is only one aspect of
this elaborate compliance system. The design of an enforcement mechanism actually
begins upstream, when government ministers in the Council of the EU, sometimes
together with members of the European Parliament, set the depth of a regulatory arrange-
ment, establish the enforcement prerogatives and constraints of the supranational bureau-
cracy and may reserve to themselves some involvement in enforcing the policy.
This is not uncommon. For instance, while the Commission establishes the incompat-
ibility of a state aid measure with internal market rules, the Council can decide otherwise,
in derogationfrom this prerogative. In economicgovernance, negotiationsrevolved around
the criteria to determine an excessive deficit(e.g. should spending on researchbe excluded?
How should pension reforms be accounted for?), the procedure to follow (Should a propo-
sal establishingan excess require a Councilqualified majority for approvalor for rejection?)
and the sanctionsfor noncompliance (Should theyamount to 0.2% or 0.25% of a country’s
gross domestic product (GDP)?). The objectiveof this article is to explain why EU govern-
ments took different positions on these design features.
Attitudes on enforcement design have hardly received attention in the extensive
literature that investigates the conflict dimensions structuring negotiations in the EU
(cf Bailer et al., 2015; Hagemann and Høyland, 2008; Thomson, 2011; Thomson
et al., 2006). In some studies, the depth of cooperation emerges as a salient divide.
592 European Union Politics 22(4)
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